FHA Mortgage Loans

Since 1934, the FHA has insured millions of home mortgages with a market share of 30% in 2010 vs 3% in 2007. In 2009, FHA programs insured nearly 2 million loans, which included 750,000 first-time home buyers.

The Federal Housing Administration (FHA) was created out of the National Housing Act of 1934, and was established to increase home construction, reduce unemployment and insure government loan programs.

FHA loans have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. The program originated during the Great Depression of the 1930s, when the rates of foreclosures and defaults rose sharply, and the program was intended to provide lenders with sufficient insurance.

Some FHA programs were subsidized by the government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers.

While most people believe that the FHA lends money directly to borrowers, it actually just insures a certain type of loan that is financed by traditional banks and mortgage lenders.

Four of the most visible single family housing programs that FHA offers are, Section 203(b), Section 234(c), Section 203(k) and Home Equity Conversion Mortgages (HECM) – Reverse Mortgages.

FHA Loan Type Highlights:

Section 203(b)

largest of FHA’s single family programs

1-4 unit properties are eligible

flexible credit requirements

3.5% down payment allowed

down payment may be a gift from specific sources

Section 234(c)

provides mortgage insurance for individual condominium units

credit, down payment and limits of 203(b) apply

in 2010, condominium complexes must be approved through HRAP/DELRAP to be eligible for FHA insurance

FHA programs go beyond the scope of the previously listed programs. They offer a Streamline Refinance as well as a Streamline 203(k) for limited repairs. Also, recent legislation has helped FHA offer special programs with incentives to lenders for modifying and refinancing existing mortgages like with the “Making Home Affordable Program.”

When looking for a loan program to fit your specific needs, take a close look at FHA as their programs have become more attractive to both lenders and consumers.

With favorable loan terms, higher loan limits, 30 year fixed repayment terms and flexible down payment options, FHA will continue to encourage home ownership, provide liquidity and stability to the mortgage market.

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Frequently Asked FHA Questions:

Q. What are the credit requirements for most FHA lenders?

As of 2010, the majority of lenders are leaning toward a mid credit score of 640.

Q. How much can I afford?

By providing your mortgage professional the required documentation, a detailed analysis will be provided that includes your maximum loan amount

Q. How will I know if the condo/townhome I wan to buy is eligible for FHA financing?

The following link will allow you to enter your zip code for a list of eligible properties: CLICK HERE

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My name is David Orsini and I would love to do your loan. Click the Apply Now button to apply for a mortgage with me today! More about me, i loved to eat, especially pizza. It is great. I also enjoy tennis!